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Aakanksha Reddy

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Chapter 14:

Fallacy

Frustrated father: ” Do you think I am your RBI to lend you helicopter money whenever you break a glass window with your wannabe helicopter shot?”, screamed a middle-class father at his teenage son who broke the glass window for the ump- teenth time. “Papa! I am stimulating the economy by replacing the broken window. I will generate consumption and thereby boost produc- tion if I purchase a new pane of glass at the local store,” ex- plained his son while tugging his 7 number cricket jersey. His father, amused by his justication, then replied, I thought of gifting you a new cricket bat with this money. Never mind then. The son then realised that there is no value creation with a mere replacement as nothing new is produced. The young boy was delivered a googly, the broken window fallacy. He was stumped and he realised that there are no free hits in life as everything has an opportunity cost attached to it. ∞∞∞ There is an opportunity cost involved in replacing the broken old with the same new. Just imagine channelling all your energy and resources in something more productive, such as ticking some- thing o your bucket list. In the language of economics, investing to cover depreciation will keep an economy stagnant at a cer- tain level and not increase the economy’s growth. By investing in human capital (YOURSELF) you can achieve a higher level of growth. To conclude, self-growth and self-care should be a per- petual process and not a recovery or feedback mechanism